The free-trade trade
PRESIDENT OBAMA met with President Ricardo Martinelli of Panama on Thursday in the latest sign of the U.S. administration’s belated but welcome shift in favor of free-trade agreements with three long-standing American allies — Panama, Colombia and South Korea.
In fact, Mr. Obama has finished revising tariff-slashing deals with South Korea and Panama — the concern regarding the former was market access for U.S. automakers, the latter, Panama’s alleged role as a haven for income-tax evasion. The president is ready to submit those two agreements for congressional approval.
On Colombia, the White House and the Colombian government have agreed on an “action plan” to protect labor leaders, pursue crimes against union members and reform Colombian labor law. There are still a few procedural hurdles related to implementation of that plan, but it appears likely that the Obama administration will soon be ready to present Congress the Colombia deal, too.
Assuming that happens, the next big move, politically and substantively, will be up to the Republicans in Congress. The Trade Adjustment Assistance (TAA) program, which provides some cash, job training and relocation aid for workers who lose their jobs on account of competition from imports, has traditionally served as a companion to free-trade agreements. Republicans, however, blocked renewal of the program this year for two reasons: Some Republicans, including House leaders, thought that it was justifiable to hold up TAA until the administration moved forward on the Colombia pact; others, including the House Republican Study Group, which is dominated by conservative back-benchers, object to TAA in principle, calling it wasteful spending.
It’s time for the former group to exert control over the latter. To be sure, TAA, which cost about $1.2 billion in fiscal 2010, is hardly perfect: It is not clear why workers who lose jobs because of imports should get more aid than workers who lose their jobs for other reasons; studies have shown only modest long-term benefits to the relative handful who receive TAA training. Yet the reality is that, by promising some palliation of short-term dislocations, TAA helps build the social and political consensus without which trade liberalization — and its benefits — would not be possible.
Now that Mr. Obama has done almost all of what Republicans — and many others, this page included — have requested on Colombia, it’s up to the GOP to deliver the votes to pass free trade on a bipartisan basis. If the president can take the heat from his party’s labor union base, Republican leaders should be able to stand down their conservative followers.